Factors that govern the economics of service and product delivery are the same across different industries and sectors. To draw a parallel with the mobile industry and give perspective, it is said to be more expensive per unit to transport goods within Africa than it is to Europe. Poor infrastructure by way of dilapidated or nonexistent roads, railway lines with different gauges, poor logistical planning and business models have made intra Africa trade a costly nightmare. Plans to address this have been floated, with the ideas being a focused on consolidated pan-african road and rail networks.
So how does this related to uptake of local content on mobile? In the rapidly changing world of technology, mobile network operators introduced mobile data, that has seen an increase in the consumption of services brought about by increased mobile phone utility. With this increased uptake, there has also been an increase in the demand for services that rely heavily on mobile data. This has seen all mobile network operators invest capital to own shares in the various undersea cables that connect us to the rest of the world to reduce reliance on satellite connectivity that is expensive. This initial surge by consumers on mobile data was driven by the need to access information and content which more often than not was created or resided outside the country. According to the State of the Mobile Web report released in July 2012 by Opera, the top 10 visited properties are Facebook, Google, Twitter, Waptrick, Tagged.com, Eskimi, Goal.com, BBC, Nation and Wikipedia. Of these properties, only one would be considered local, and I think differently about the social networks on the list as they would probably dominate the ranking in other countries as well .
Here is the clincher though, with a plateau on the number of mobile data consumers in the country, the mobile network operators are looking toward the rural consumer, whose ARPU (average return per user) is “low”. However, it is the larger properties like Facebook and WapTrick that seem to draw the mobile operators interest to create differentiated models such as Facebook Zero, that allow for subsided access. This is where they have got it wrong and I have previously opined that the social network of the rural consumer will not be enhanced by the properties that have seen massive adoption from urban consumers. Both the urban and rural consumer are hungry for a different flavor of content that will be delivered via mobile data, in audio and video form. While the content producers are working with a least cost model to drive numbers, operators seem stuck with obscene data pricing models that I can only attribute with an attempt to recoup their cable investments in the shortest time possible. This results in the cost of access to what would be much loved content, being double and sometimes triple the cost of the content itself.
With operators owning decent shares in the pipes that deliver the content, it is indeed possible to experiment with differentiated models that will see the cost of access to content using mobile data greatly reduce.
The demand is clearly there, the bottleneck remains the cost of consumption and this prerogative lies solely with the network operators. It’s their move now, other players have done their bit.